Falling oil prices lift domestic consumption by 4.9% in Nov

With oil prices slumping to five-year low, India's fuel consumption has risen by 4.9 per cent in November on the back of a sharp recovery in diesel sales.

Fuel consumption in November rose 4.9 per cent to 13.9 million tonnes from 13.3 million tonnes in the same period a year ago, according to latest data available from the Oil Ministry here on Monday.

Diesel, the most consumed fuel in the country, saw a sharp recovery with sales rising 3 per cent to 6.002 million tonnes. The rise was in contrast to drop in consumption in the previous two months.

Fuel consumption this fiscal has risen by 3.88 million tonnes or 3.7 per cent to 108 million tonnes.

International oil prices have fallen 46 per cent this year, the biggest annual drop since 2008, as oil cartel OPEC resisted supply cuts to defend market share even as production in the US climbed to the highest level in three decades amid a shale boom. Brent crude, a pricing benchmark for more than half of the world's oil, is trading around $60 per barrel. 

With retail prices been successively cut since August, petrol consumption has been on rise — it grew by 3.6 per cent to 1.5 million tonnes in November and by 9.5 per cent in April-November to 12.5 million tonnes.

Diesel, which makes up for 43 per cent of all petroleum products consumed in the country, saw sales rise by 1 per cent in April-November to 45.8 million tonnes.

LPG consumption rose 14.5 per cent to 1.57 million tonnes in November and by 10.4 per cent to 11.6 million tonnes in first eight months of current fiscal that began in April. With domestic output stagnant at 3.1 million tonnes, India imported 3 per cent more crude oil in November at 15 million tonnes. However, in value terms the imports cost $8.8 billion, down from $11.2 billion in November 2013.

India had paid $142.9 billion for oil imports in 2013-14 fiscal. Imports in first eight months cost $89.3 billion, down from 95.4 billion in April-November 2013. Crude oil imports this fiscal have been marginally lower at 125.7 million tonnes as compared to 126.9 million 

tonnes a year ago.